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Item 2 25 points Item Skipped

Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:

PenskeStanzaRevenues$(746,000)$(792,000)Cost of goods sold266,100198,000Depreciation expense201,000318,000Investment incomeNot given0Dividends declared80,00060,000Retained earnings, 1/1/18(670,000)(214,000)Current assets434,000560,000Copyrights984,000537,500Royalty agreements688,0001,130,000Investment in StanzaNot given0Liabilities(546,000)(1,517,500)Common stock(600,000)($20 par)(200,000)($10 par)Additional paid-in capital(150,000)(80,000)

Note: Parentheses indicate a credit balance.

On January 1, 2018, Penske acquired all of Stanza's outstanding stock for $780,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $592,000 book value but a fair value of $760,000.

1. As of December 31, 2018, what is the consolidated copyrights balance?
2. For the year ending December 31, 2018, what is consolidated net income?
3. As of December 31, 2018, what is the consolidated retained earnings balance?
4. As of December 31, 2018, what is the consolidated balance to be reported for goodwill?